CHICAGO - Moody' Investors Service has revised Wisconsin-based ProHealth Care Inc.'s outlook to negative after several years of softening operating results.
The rating agency affirmed ProHealth's A1 rating in a review published Nov. 21. The agency shifted the outlook from stable to negative, a move that impacts $300 million of debt sold through the Wisconsin Health and Educational Facilities Authority.
The rating level is supported by ProHealth's solid market position, history of strong financial performance and strengthening balance sheet, and good coverage of an above average, and growing, debt position.
ProHealth enjoys a 41% market share and has a track record of meeting budgets and exercising fiscal discipline.
ProHealth is is challenged by a competitive operating environment heightened by Aurora Health's opening of a hospital in western Waukesha County in 2010. "The negative rating outlook reflects pressure to rebuild momentum, after two years of softening, to generate ample cash-flow to cover a high and rising debt load," Moody's wrote.
The system, created by the merger of Waukesha Memorial Hospital and Oconomowoc Memorial Hospital outside of Milwaukee, plans additional borrowing of $70 million through a direct placement.
